Daily Management Review

US Factories To Focus On Basic Consumer Product Production That Are In Highest Demand


03/16/2020




US Factories To Focus On Basic Consumer Product Production That Are In Highest Demand
Companies making consumer products have stopped production of niche items such as scented bleach and have instead sped up manufacturing of more basic merchandise which is in high demand as food and many other essentials are flying off the shelf of supermarkets.
 
Shortages of essential items were being fueled because of hoarding toilet paper, cleaning supplies and food staples, brick-and-mortar retailers have warned. Many of the household staples on Amazon.com, the largest online retailer of the world, have sold out, the company said.
 
With the fast spreading and potentially deadly coronavirus is has caused alarm among consumers right across the Europe and the United States, a telephonic meeting with executives of 30 grocery stores, including Amazon.com’s Whole Foods, Target Corp, Costco Wholesale Corp and Walmart Inc, was held by the US president Donald Trump. US supply lines were “working pretty well”, assured Trump administration official Larry Kudlow through a television news channel.
 
“The grocery supply chain is not going to shut down,” said Doug Baker, who leads crisis management for the Food Marketing Institute (FMI), the trade group representing food retailers and wholesalers.
 
That however does not mean that every product that is in demand will be on the shelves of the supermarkets.
 
Baker said that consumer product making companies are more focused on the highest priority items in order to try and meet the unprecedented growth in demand as factories prepare to start round-the-clock operations.
 
For example, manufacturers will now focus only on the production of the most popular bleach instead of also manufacturing bleach in several different sizes and scents. Production of food with exotic flavours could also be stopped. That will help to reduce the time of the products reaching the market because manufacturing different products requires changes in the production process.
 
“Manufacturers have also started allocating goods so they can ensure equal distribution across the country,” Baker said.
 
Restrictions on purchases of toilet paper, Lysol sanitizing wipes and other products that are in very high demand has been imposed by the US retail giants such as Walmart Inc, Publix and Kroger Co.
 
Authorization to store managers to manage their inventory, “including the discretion to limit sales quantities on items that are in unusually high demand”, has been given by Walmart, which gets more than half its U.S. revenue from grocery sales, the company said.
 
A spokesperson of the company said that the replenishment efforts of the company includes “diverting products to areas of the country where they are needed most and routing deliveries directly to stores.”
 
Firms in the grocery industry are also trying to ensure that there is enough labor to enable movement of products.  
 
More than 3,000 confirmed cases of coronavirus infection have so far been reported from the United States with death of at least 62 people.
 
Shifting workers from restaurant supply chain jobs is a part of the contingency plans, because many cities in the United States are imposing movement curbs and imposing “social distancing measures” such as barring sit-down dining, said Baker, from FMI.
 
(Source:www.reuters.com)






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